Core Viewpoint - The continuous strength in the banking sector has led to multiple bank convertible bonds being redeemed early, with Hangzhou Bank's convertible bond being the third to exit the market this year due to favorable stock performance [1][2]. Group 1: Early Redemption of Convertible Bonds - Hangzhou Bank announced the early redemption of its convertible bond, triggering the conditional redemption clause as the stock price exceeded 130% of the conversion price for 15 trading days [2]. - The bond, issued on March 29, 2021, has a total of 150 million units with a face value of 100 yuan each and a maturity of six years, set to expire on March 29, 2027 [2]. - The trend of early redemptions in bank convertible bonds is linked to the recent strong performance of bank stocks, which have improved significantly compared to previous years [2][3]. Group 2: Market Trends and Data - As of May 27, the scale of AAA-rated convertible bonds has shrunk to approximately 252.73 billion yuan, down from 291.27 billion yuan at the end of 2024, indicating a reduction of nearly 40 billion yuan in less than six months [4]. - The market currently has 10 bank convertible bonds, with the total scale potentially decreasing from around 170 billion yuan to approximately 100 billion yuan due to accelerated redemptions [6]. - The lack of new bank convertible bond issuances since 2023, combined with the upcoming maturity of existing bonds, is expected to lead to a rapid contraction in the scale of bank convertible bonds by 2025 [7].

Core Viewpoint - Hangzhou Bank has decided to exercise the early redemption rights of its convertible bonds, marking the third bank convertible bond to be redeemed early this year, following Chengyin and Suhang convertible bonds [1][3]. Group 1: Early Redemption of Hangzhou Bank Convertible Bonds - Hangzhou Bank's convertible bonds (Hangyin Convertible Bonds) will be redeemed at face value plus accrued interest, as the stock price has exceeded 130% of the conversion price for 15 trading days [3][4]. - The Hangyin Convertible Bonds were issued on March 29, 2021, with a total of 150 million bonds, each with a face value of 100 yuan, and a maturity date of March 29, 2027 [4]. Group 2: Market Context and Trends - The early redemption of bank convertible bonds is linked to the recent strong performance of bank stocks, which have seen a significant recovery from previous undervaluation [4]. - Hangzhou Bank's stock has increased over 70% since the beginning of 2024, contributing to the favorable conditions for early redemption [4]. Group 3: Trends in AAA-rated Convertible Bonds - The scale of AAA-rated convertible bonds has decreased from 2,912.69 billion yuan at the end of 2024 to approximately 2,527.34 billion yuan as of May 27, 2023, a reduction of nearly 400 billion yuan in less than six months [7][8]. - The number of AAA-rated convertible bonds has also decreased, indicating a shrinking market for high-quality convertible bonds [8]. Group 4: Supply and Demand Dynamics - The demand for bank convertible bonds is expected to strengthen due to regulatory changes that emphasize performance benchmarks for public funds, leading to a potential decrease in the total outstanding amount of bank convertible bonds from around 1,700 billion yuan to approximately 1,000 billion yuan [9]. - The lack of new bank convertible bond issuances since 2023, combined with the upcoming maturity of existing bonds, is likely to create a supply-demand imbalance in the market [10].